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Gap cuts forecast as sales drop

GAP menswear AW14

GAP menswear AW14

GAP menswear AW14

Gap has been forced to cut its 2015 profit forecast for the year as like-for-like sales fell 4% at its namesake brand in the third quarter.

The US business’s Banana Republic chain also performed badly, with like-for-likes down 12%, while Old Navy managed to post an increase in sales of 4%, according to the The Wall Street Journal.

Despite the drop, it marks an improvement on the same period last year when comparable sales at Gap declined 5%.

Net income at Gap Inc fell to $248m (£162m) in the third quarter ended October 31, down from $351m (£230) a year earlier. However, online sales rose 2.3% to $635m (£416m.)

The San Francisco-based retailer said it now expects to make between $2.38 to $2.42 (£1.56 to £1.58) a share, compared with prior forecasts of $2.75 to $2.80 (£1.80 to £1.83.).

Gap has been trying to revive its namesake brand for several months, bringing in new management and implementing cost-cutting measures such as cutting jobs and closing stores.

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